Gary Gensler, the chairman of the Securities and Exchange Commission (SEC), declared at the end of 2021 that his agency should oversee transactions involving digital currency.
According to him, securities regulations can be used to control these transactions. Gensler changed his position last week. He now thinks that the Commodity Futures Trading Commission ought to have authority over digital assets like stablecoins, which have a total market valuation of more than $150 billion (CFTC).
These tools resemble stock exchanges. The management of stablecoin issuers needs special consideration. The risk of fraud and pricing manipulation will be reduced thanks to the regulation of these businesses.
Gensler stressed: "I believe the CFTC ought to have additional authority. The CFTC is now unable to exert direct oversight over tokens that have no connection to securities."
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However, given that the majority of cryptocurrencies have properties that are more similar to those of securities, the SEC should treat transactions involving them as such.
CFTC Chairman Rostyn Behnam supported Gary Gensler's initiative.
In addition, he said that his office already monitors stablecoins, but the Commodity Futures Trading Commission needs additional powers that will expand its ability to protect investors.